There are visible signs of moderation in the growth of the Indian economy. A study by HSBC Global Research showed that 55% of the economy continues to grow, up from 65% a quarter ago.

To get a sense of the state of the economy, HSBC looks at 100 growth indicators and relates them to different sectors, both on the production and spending sides. By analyzing all sectors, HSBC Global Research highlighted that a majority share (more than 50% of indicators) in agriculture, industrial financing, investment and public spending remains positive.

On the other hand, consumption indicators in rural and urban India, as well as consumer credit, are weakening.

“All indicators in the mining and utility sectors have weakened, and trade and transportation remain weak,” the study shows. “The collapse in manufacturing also showed lower consumer goods production (although construction goods remain strong),” HSBC Global Research said.

And then? HSBC Global Research believes that the exuberance of growth in recent years has been driven by the rise of several high-tech sectors (“the new India”). The exuberance of electronics manufacturing, global competence centers and digital start-ups has led to high growth and revenues at the top of the pyramid.

“After a few heady years, the base is rising and growth in these sectors is normalizing to more sustainable levels. Overall GDP growth is gradually converging from levels above 7% to a more sustainable but still solid ‘potential growth’ level of 6.5%,” HSBC Global Research said in a November 14 report.

At the sectoral level, the report highlights that 60% of agricultural sector indicators are currently positive compared to 50% in the last quarter. On the other hand, 50% of manufacturing sector indicators appear positive, compared to 75% in the previous quarter.

“The erratic rains during the monsoon adversely affected production and weakened the sector. But the season ended with normal temperatures (after the heatwave from March to May) and heavy rains which filled the reservoirs, bringing better growth to the current quarter. And if no major shocks occur again, agricultural production could increase further over the next six months,” HSBC Global Research said, adding that in the manufacturing sector, capital and construction goods are on solid bases. strong, but consumer goods are weaker.

The research firm added that those hoping that the 7%-plus growth figures of recent years would be the new normal will likely need to recalibrate their expectations, and the stock market may well be doing so.

Amid the ongoing correction on Dalal Street, the benchmark stock index BSE Sensex fell nearly 8 per cent, down 6,608 points, to 77,690.95 on November 13, 2024 from 84,299.78 on September 30, 2024.